South Africa is considering the sale of some of Eskom’s power stations or an initial public offering of some of the cash-strapped state utility’s shares, the Business Day newspaper said on Wednesday, quoting a Treasury official.
The disposal of power stations or an IPO would be in addition to the sale of other state-owned assets intended to fund Eskom’s 23 billion rand ($2 billion) cash shortfall, the paper said.
“The question as to whether portions of state-owned enterprises can be spun off to raise money is on the table. It is decidedly on the table,” the paper quoted Treasury director general Lungisa Fuzile as saying.
“The Treasury has been asked by a committee of Cabinet to look into how this could be done and whether, in the case of Eskom, it would be more feasible to do it in relation to power stations or the entirety of the balance sheet of the entity.”
Fuzile added that the government had revived a discarded policy of the late 1990s, which stipulated that the private sector could take a stake of up to 30 percent in Eskom’s power-generating assets.
Eskom is battling the worst power supply shortages in Africa’s most advanced economy since 2008.
Left-leaning elements of the ruling African National Congress and unions have been opposed to privatisation of Eskom, arguing it would lead to job losses and undermine efforts to expand grid access to more black South Africans.